The Alternative Investment Management Association, the London-based hedge fund industry association, has announced plans to publish what it says will be the world’s first global guide to s
The Alternative Investment Management Association, the London-based hedge fund industry association, has announced plans to publish what it says will be the world’s first global guide to sound practices for fund of hedge funds managers.
The guide, which is scheduled for publication early next years, is being developed by leading fund of funds practitioners and will focus on areas including risk management, disclosure to investors, valuation, management of conflicts of interest and other operational issues.
The publication is intended to be a practical business tool for fund of hedge funds managers and will also seek to provide relevant and insightful information for the investor, regulatory and political communities, as well as hedge fund service providers.
The guide will be produced and overseen by a steering group of fund of hedge funds managers, who between them manage USD150bn in assets worldwide. The group is chaired by Gilles du Fretay, chairman of HDF Finance and also includes Financial Risk Management, Man Investments, Fauchier Partners, Allianz Alternative Asset Management, Unigestion, Pacific Alternative Asset Management, Ivy Asset Management and Penjing Asset Management.
‘There are currently no dedicated guidelines for fund of hedge funds managers, yet the majority of new institutional investors tend to favour this investment route, rather than investing directly in hedge funds,’ says Aima deputy chief executive Andrew Baker, a member of the steering group.
‘With established sound practices in place for hedge fund managers and on various hedge fund-related topics, there is a desire to document managers’ activities and responsibilities. The guidelines will demonstrate both the amount of work achieved in this area to date as well as the industry’s continued focus on documenting and enhancing its practices.’
According to Hedge Fund Research, global hedge fund industry assets grew from USD1,426bn at the end of 2006 to about USD1,875bn at the end of the first quarter of this year, while the number of funds of hedge funds has grown from 2,220 to more than 2,600 – growth boosted, Aima says, by industry’s diversification and performance characteristics.
The guide to sound practices for fund of hedge funds managers will expand Aima’s body of work developed over the past 10 years including guidelines on managers, valuation, administration, governance, business continuity, due diligence for managers and service providers, anti-money laundering, and industry certification (in conjunction with the Chartered Alternative Investment Analyst Association).
Aima has more than 1,280 corporate members in 47 countries including hedge fund managers, fund of hedge funds managers, prime brokers, providers of legal and accounting services and fund administrators.
